External influences - political Flashcards
What are some external political influences?
Government policies (Brexit, New enterprise zones) Tax (Fiscal policies) Interest rates (monetary policies) Competition regulation (CMA) Privatisation/Nationalisation International trade barriers
How will Brexit impact businesses?
- inabilities to trade with free movement
- worser supplier relations
- greater barrier to entry
- Losing market share in the EU
- Immigration changes leading to employment issues
- Import and export taxes
How will New enterprise zones impact businesses?
- incentives businesses to work
- special economic zones leading to agglomeration and clustering which over time can lead to certain benefits
What are fiscal policies?
the use of government spending and tax policies to influence economic conditions
How do fiscal policies impact businesses?
- less willing to spend money (public and businesses)
- Boosts public businesses and general infastructure
- less disposable income
- can increase corporate taxes
What are monetary policies?
Monetary policy involves changes in interest rates, the supply of money & credit and exchange rates to influence the economy.
How do monetary policies impact businesses?
- easier borrowing for businesses causing growth
- incentive to save
- less consumption
- more consuming spending
- discourage workers
How does competition regulation impact businesses?
- price competitions leading to pricing wars
- increased choice (substitutes)
- less monopolies
- fairer market and growth
- increased chance of innovation
- dynamic efficiency
- manages merging and takeovers
What is the CMA? and what do they do?
Competition and market authority. They investige mergers and takeovers.
How does privatisation and nationalisation impact businesses?
- efficient planning and contingency plans
- improves economic welfare
- financial freedom
- better flexibility
- saves money with better consumer relations
What is privatisation and nationalisation?
privatisation = the transfer of a business, industry, or service from public to private ownership and control e.g. royal mail nationalisation = he transfer of a major branch of industry or commerce from private to state ownership or control e.g. Bank of England
How do international trade barriers impact businesses?
- free trade leads to cheaper C.O.S
- cheaper movement of supples
- possibly reduces exports and increase taxes
- exploitation of poorer countries
- allows outsourcing for large TNCs
- Easy negotiations with agents
- better synergy with foreign markets e.g. promotional campaigns
